Trade Setup for Monday: Top 10 things you should know before Opening Bell

The bulls maintained their hold on D-Street throughout the trading session on Friday unlike the three preceding sessions when it moved in a narrow range on either side. The index registered a positive close for the seventh straight session and made a strong bull candle on the charts.

Formation of a strong bull candle on daily charts after ‘Doji’ type pattern formed on the charts for the past 4 trading sessions is a bullish sign. The index now trades above key short-term moving averages and MACD is also on the verge to give a bullish crossover.

The stars are aligning in the right direction for the bulls and as long as Nifty stays above 10350, the bulls could make an attempt to take out its record high placed at 10,490 if not in November series then in December series.

The index which opened at 10,366 slipped marginally to 10,363 in morning trade. The index rose to an intraday high of 10,490.45 before closing the day 40 points higher at 10,389.70.

“Albeit Nifty50 moved in a narrow range of 42 points it appears that it made a genuine attempt to break away from the sluggish phase witnessed in the last 4 trading sessions. On the weekly charts it registered a solid bull candle which has erased all the losses of preceding week,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Hence, as long as Nifty50 sustains above 10300 levels one can take a positive stance and look for a retest of 10490 levels. However, as Nifty50 is facing resistance on longer time frame charts it looks prudent to have a tight stop below 10300 on a closing basis as a breach of this shall motivate the bears to put more pressure on the markets,” he said.

India VIX fell down by 2.51 percent at 13.51. VIX has to cool down below 13-12.50 zones to get the market stable which could propel the next round of rally towards new high territory.

We have collated the top ten data points to help you spot profitable trade.

Key Support & Resistance Level for Nifty:

The Nifty closed at 10,389.7 on Friday. According to Pivot charts, the key support level is placed at 10,366.43, followed by 10,343.17. If the index starts to move higher, key resistance levels to watch out for are 10,408.73 and 10,427.77.

Nifty Bank:

Nifty Bank closed at 25,779.7 on Friday. Important Pivot level, which will act as crucial support for the index, is placed at 25,736.2, followed by 25,692.7. On the upside, key resistance level is 25,836.1 followed by 25,892.5.

Call Options Data:

Maximum Call open interest (OI) of 60.39 lakh contracts stands at strike price 10,500, which will act as a crucial resistance level for the index in the November series, followed by 10,400, which now holds 47.01 lakh contracts in open interest, and 10,600, which has accumulated 42.98 lakh contracts in OI.

There was hardly any Call writing seen.

Call unwinding was seen at strike prices of 10,300 (8.5 lakh contracts were shed), followed by 10,400, which shed 3.42 lakh contracts and 10,500, which saw shedding of 2.59 lakh contracts.

Put Options Data:

Maximum Put OI of 62.3 lakh contracts was seen at strike price 10,300 which will act as a crucial base for the index in November series, followed by 10,000, which has accumulated 57.26 lakh contracts in open interest, and 10,200, which now holds 56.51 lakh contracts in open interest.

Put writing was seen at a strike price of 10,400, which saw the addition of 14.57 lakh contracts, along with 10,200, which saw the addition of 4.37 lakh contracts and 10,000, which saw the addition of 3.64 lakh contracts.

Put unwinding was seen at strike price of 10,100, which saw shedding of 1.79 lakh contracts.

FII & DII Data:

Foreign institutional investors (FIIs) sold shares worth Rs 416.28 crore compared to domestic institutional investors who bought Rs 427.63 crore worth of shares in the Indian equity market on Friday, data available with the NSE showed.

Stocks with high delivery percentage:

High delivery percentage suggests that investors are accepting delivery of the stock which means that investors are bullish on the stock.

116 stocks saw long buildup

14 stocks saw short covering:

A decrease in open interest along with an increase in price mostly indicates short covering.

73 stocks saw short buildup:

An increase in open interest along with a decrease in price mostly indicates short positions being built up.

8 stocks saw long unwinding

Long Unwinding happens when there is a decrease in OI as well as in price.